Challenges of Palm Oil Production:
Forced Labor and Child Labor

 

 

Palm oil is the cheapest vegetable oil on the market, in part because of its high output per hectare, but also because of the cheap labor it depends on. In some cases, labor is not just cheap, but forced under violence or the threat of violence. Child labor is common, with children doing hazardous tasks. 

 

"Indonesia's Palm Oil Industry Rife With Human-Rights Abuses," by Schuster Institute Senior Fellow E. Benjamin Skinner and published at Businessweek.com, tells of forced labor and child labor in the palm oil supply chain that begins on an oil palm plantation in Indonesia.  

 

The State of the Work Force in Indonesia

 

As in many industries in developing and emerging economies, many of which are powerfully influenced by multinational conglomerates and special interest groups, worker exploitation and unrest has been reported in the palm oil industry in Indonesia. Most cases of worker exploitation involve disputes over wages and widespread practice of using contract labor, which in some instances have led to violence, police brutality, and death.

 

The International Trade Union Confederation’s (ITUC) report for Indonesia in 2012 reports that the upward trend of short-term contract labor versus permanent labor puts workers in more precarious working conditions. The ITUC’s report states the number of permanent workers in the formal labor force dropped to 35% in 2011 from 67% in 2005, according to the National Solidarity Committee.

 

Last year (2012) saw an upsurge of trade union strikes generally, which were followed by promises to address workers’ rights, benefits, and to raise minimum wage in some provinces. A Reuters news analyst suggests there will be more strikes this year in the palm oil industry, in spite of promises to increase minimum wage in some provinces.

 

The biggest wage hike (49%) to 1.752 million rupiah ($180) is promised in East Kalimantan. All provinces have promised minimum wage increases, though the amount of increase differs between each province.

 

The president of the Indonesian Forestry and Allied Workers’ Union (KAHURINDO) Khoiral Anam told Reuters that “Palm oil firms have responded [to the strikes] by talking about redundancies or fewer employee benefits, such as free housing or subsidized electricity and food… Strikes could occur at any time, should a company not wish to abide by the minimum wage or as a consequence of reducing benefits."

 

While trade unions are legal, the procedures which they must follow make actions complicated and sometimes prohibitive. Still, there have been successes and cooperation. The ITUC states in their 2012 report “Despite the creation of nearly 4 million new jobs and the decrease of the unemployment rate, the lack of secure and decent jobs remain a major issue in the country. On 28 October, the Parliament passed the Social Security Providers Bill (BPJS), thus clearing the way for long-awaited pension, medical, job-related accident, unemployment and other benefits to millions Indonesians.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Labor Exploitation on Palm Oil Plantations in Indonesia

 

Forced Labor & Debt Bondage

 

At the far end of the worker exploitation spectrum is modern-day slavery, an umbrella phrase under which forced labor and debt bondage fall. Forced labor is legally defined, according to the U.S. Department of Labor’s Bureau of International Labor Affairs “List of Goods Produced By Child Labor or Forced Child Labor,” as “all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily…” It includes “work provided or obtained by force, fraud or coercion…” “Child labor” is all labor under the age of 15. Child labor under the age of 18 that is exploitative under certain circumstances would be considered “forced child labor.”

 

While the U.S. Department of Labor (DOL) lists forced labor in palm oil produced in Malaysia and child labor in palm oil produced in Indonesia, our team of investigative journalists found forced labor on an oil palm plantation in East Kalimantan in Indonesia. 

 

"Indonesia's Palm Oil Industry Rife With Human-Rights Abuses" is the story of this alleged forced labor. It was only after his escape that Adam (not his real name) told the Schuster Institute the story of his enslavement. When he was 19, he said a labor recruiter promised him work on an oil palm plantation 2000 miles away. Part-way to his destination, Adam said the recruiter compelled him and his fellow new-recruits to sign a contract with terms that were far different from what the recruiter had led Adam to expect.

 

Most daunting: The labor recruiter allegedly told the recruits that the contracting company would not pay workers anything for two years, instead “loaning” them up to $16 per month for necessities such as rudimentary healthcare or food beyond the meager rations they would receive on the plantation.

 

The contract stated (see slide 4) that under no circumstances would workers be allowed leave the plantation, even temporarily, or to return home during the two years of their contract. To ensure compliance, Adam said the recruiter confiscated their national IDs and other legal documents.

 

This system, whereby workers aren’t paid for their work until after their work commitments are complete and access to cash is through loans from the recruiter, effectively traps workers in a situation of false debt, also known as “coercive fraudulent debt bondage slavery.”

 

Migrants like Adam, whether traveling within the country or migrating outside Indonesia, are especially vulnerable to this type of coercion because of role labor recruitment agencies play, not all of which are registered or monitored for labor law compliance.

 

A 2012 venture between Indonesia and Malaysia established the Bagus Bersaudara Sdn. Bhd in Sabah, Malaysia, to give legal protections to and improve the welfare of migrating Indonesians, most of whom work on palm oil plantations, and provide a pathway to migration that steers clear of unscrupulous labor recruitment agents. 

 

 

 

Child Labor

 

Due to economic hardships experienced by many families in Indonesia, child labor is common. The government’s new Manpower Act has set 2020 as the year in which it will have eradicated child labor between the ages of 7 and 15 in programs that will provide opportunities for learning and advancement.

 

Because Indonesia's labor laws, however, are still based on Dutch Colonial Government Ordinance of 1925, child labor from 12 years old is not illegal. Act No. 1 of 1951 raised that age to 14, but it was never implemented, according to the U.S. Department of Labor Bureau of International Labor Affairs.

 

In 1999, Indonesia ratified the International Labour Organization's Convention 138 which sets the minimum working age at 15, and in 2000, it ratified Convention 182 on the Worst Forms of Child Labor, which recognizes “work which…is likely to harm the health, safety or morals of children” for the purpose of eliminating it. The Manpower Act will set the minimum working age at 15, and for work that is hazardous, 18.

 

Child labor has been reported on oil palm plantations in Indonesia and is included in the DOL’s “List of Goods Produced By Child Labor or Forced Child Labor.” During our investigation into forced labor on oil palm plantations in Indonesia, our team of reporters witnessed or received reports of child labor on at least 12 plantations.

 

Children commonly assist family members with tasks in the nursery. Others collect fallen palm fruitlets from the ground for transport to the mills. Still others have their own work agreements with plantation supervisors, like the 12-year-old child (top picture insert) who sprays the toxic herbicide Paraquat on two hectares (nearly five acres) of land every day.

 

According to the U.S. State Department’s 2013 Trafficking in Person’s Report (TIP), there are increasing reports about children exploited in prostitution in the Riau Province of Sumatra, a region dominated by the palm oil industry, and children from North Sulawesi exploited in prostitution in West Papua, now under development for new oil palm plantations. 

 

In the Malaysian states of Sarawak and Sabah, as many as 50,000 Indonesian and Filipino children born to undocumented migrant workers in the palm oil industry are stateless, with no legal standing and no access to healthcare or education. 

 

Because of generally weak legislation, oversight, and services, migrant workers are uniquely vulnerable to exploitation, some of whom become trapped by human traffickers. Learn more about human trafficking cases in Indonesia in the 2013 TIP Report.

 

The TIP Report states that in 2012, “NGOs and government officials reported that endemic corruption among members of Indonesian security forces and government officials remained an impediment to increased effectiveness in anti-trafficking law enforcement efforts,” under which fall efforts to halt forced labor and debt bondage.